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September 23, 2009

Class Action Avenger Discusses Coupon Crusades

Legal Pad checked in with Washington, D.C., lawyer Ted Frank, the “class action avenger,” as he’s been called in the legal press, who started the Center for Class Action Fairness — a public interest law firm that attempts to intervene on behalf of consumers in potentially unfair settlements.

One of Frank’s most recent attempts at class action avenging brought him before Northern District Chief Judge Vaughn Walker last month, where he challenged the fairness of a TD Ameritrade settlement, which consists of coupons for antivirus software. Frank argued that the court should not award, or should at least limit, the requested $1.87 million in attorneys’ fees.

“If this coupon settlement has the typical 1 percent redemption rate for coupons, the requested fees far outstrip the benefits to the class,” he wrote in his objection to the proposed settlement.

Frank, who’s been profiled of late in outlets such as Forbes, said his firm is running a “guerrilla operation” on a shoestring budget: “A first year associate is going to be getting paid more than I’m getting paid.”

Changing the system ... from within. After the jump.

As a blogger at Overlawyered, Point of Law and Above the Law, one of the most frequent questions Frank would get was from consumers who’d gotten a random notice of a settlement that entitled them to some not-useful coupon while lawyers collected fees — they’d ask him: What can I do about this? “I saw this as a niche that wasn’t getting filled,” he said. “I decided to go out and be the crazy person who does this.”

Earlier this month, Frank challenged the fairness of a TD Ameritrade settlement — which would give consumers coupons for antivirus software — before Northern District Judge Vaughn Walker in San Francisco, arguing

Frank said his office — well, Frank himself, and a part-time lawyer from another firm who’s on a one-year deferment — has had no shortage of unhappy consumers to represent but doesn’t take cases indiscriminately. It’s not a matter of keeping busy, he says, but of picking cases that can lead to a better system.

“Ideally, people stop making bad settlements because they’re afraid of we’re going to do,” he said. “We’re not at that level yet.”